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    • sparkiemalarkie
    • By sparkiemalarkie 17th May 18, 2:47 PM
    • 487Posts
    • 152Thanks
    sparkiemalarkie
    state pension voluntary contributions and tax
    • #1
    • 17th May 18, 2:47 PM
    state pension voluntary contributions and tax 17th May 18 at 2:47 PM
    Hi, I am short of 3 years NI contributions before I qualify for a full state pension.
    I have 3 working years left, but don't want to work.
    I have a small teachers pension that I'm taking at the moment.


    Will it be worth paying the 3 yrs voluntary contributions eventhough I will have to pay tax on the combined pensions?


    I have a number of unpaid recent years - pre 2016 and was wondering if this might be the cheapest way forward.


    I have a telephone appointment with DWP next week and was hoping for some thoughts before then.


    tia


    sparkie
Page 1
    • p00hsticks
    • By p00hsticks 17th May 18, 2:58 PM
    • 6,381 Posts
    • 6,917 Thanks
    p00hsticks
    • #2
    • 17th May 18, 2:58 PM
    • #2
    • 17th May 18, 2:58 PM
    Presumably you have found out you need three further years by having got your personal state pension forecast (and not by assuming that 35 years will do it) ?
    https://www.gov.uk/check-state-pension

    If you had more than 35 NI years prior to April 2016 then buying pre-2016 years won't help - you need the years after the New StatePension as introduced . If you have between 30-35 it may or may not - it will depend on the detail of your forecast / NI record.

    Whether the extra is worth it will depend on your life expectancy and your rate of tax, but it's typically a very good return for a basic rate taxpayer of average life expectancy
    • sparkiemalarkie
    • By sparkiemalarkie 17th May 18, 4:02 PM
    • 487 Posts
    • 152 Thanks
    sparkiemalarkie
    • #3
    • 17th May 18, 4:02 PM
    • #3
    • 17th May 18, 4:02 PM
    Hi thanks for the reply.
    I have just counted 34 years prior to 2015/16 (2015/16 has 32 NI credits)
    and no credits between 2012/13 and 2014/15.


    I will be taxed on approximately 4,000


    I was just wondering if putting the voluntary contributions elsewhere might be more worthwhile.

    I will wait to see what the telephone appointment throws up

    sparkie
    • mrschaucer
    • By mrschaucer 17th May 18, 4:27 PM
    • 553 Posts
    • 651 Thanks
    mrschaucer
    • #4
    • 17th May 18, 4:27 PM
    • #4
    • 17th May 18, 4:27 PM
    Hi thanks for the reply.
    I have just counted 34 years prior to 2015/16 (2015/16 has 32 NI credits)
    and no credits between 2012/13 and 2014/15.

    sparkie
    Originally posted by sparkiemalarkie
    As p00sticks said, it's no use just counting the number of years. If you have a teachers pension you will have been contracted out - you do need to check your state pension forecast as per the link provided.
    • xylophone
    • By xylophone 17th May 18, 4:42 PM
    • 26,492 Posts
    • 15,733 Thanks
    xylophone
    • #5
    • 17th May 18, 4:42 PM
    • #5
    • 17th May 18, 4:42 PM
    Have you looked at

    https://www.royallondon.com/global/documents/goodwithyourmoney/topping-up-your-state-pension-guide.pdf
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